Miles bought from Kingfisher: Banks have nowhere to fly

Banks that have partnered Kingfisher Airlines to offer air miles as rewards to credit card customers are stuck with the inventory purchased from the private carrier, as it has reduced its flight services and suspended operations on some routes.

Typically, banks buy air miles three-six months in advance from airline companies at a discount to the market price.

The lenders offer these miles as rewards to their clients for credit card spends.

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Miles bought from Kingfisher: Banks have nowhere to fly

"If a customer wants a Kingfisher card, only then are we offering the card," said a banker familiar with the developments.

The cash-strapped Kingfisher Airlines, which reported a loss of Rs 1,027 crore (Rs 10.27 billion) in 2010-11 and Rs 1,175 crore (Rs 11.75 billion) in the first nine months of this financial year, is believed to have accumulated losses of around Rs 6,000 crore (Rs 60 billion).

The airline has opted to restructure its debts for the second time and is finding it difficult to pay staff salaries on time.

Will the FM raise tax exemption limits? Will he manage to keep both industrialists and common people happy? To know all about Union Budget 2012-13, Click here!